Trump Team Stands by Budget’s $2 Trillion Math Error

Not really - unless you live in the area. But how about sending letters, faxes, texts to your representatives? Republican, Democrate or Independent
and demanding an independent audit of this budget proposal. I'd even want an international one - but I do know that will never happen - 'cause 'we
be 'Merican's and are special.

I'd call for articles of impeachment to be drawn up as well. Let our public servants know that you will not be bullied.

Here's how Larry Summers summed it up (Summer-ized? So many potential puns here) in his blog (scroll
down to 5/23):

Apparently, the budget forecasts that US growth will rise to 3.0 percent because of the Administration’s policies—largely its tax cuts and
perhaps also its regulatory policies. Fair enough if you believe in tooth-fairies and ludicrous supply-side economics.

Then the Administration asserts that it will propose revenue neutral tax cuts with the revenue neutrality coming in part because the tax cuts
stimulate growth! This is an elementary double count. You can’t use the growth benefits of tax cuts once to justify an optimistic baseline and then
again to claim that the tax cuts do not cost revenue. At least you cannot do so in a world of logic.

The Trump team prides itself on its business background. This error is akin to buying a company assuming that you can make investments that will
raise profits, but then, in calculating the increased profits, counting the higher revenues while failing to account for the fact that the investments
would actually cost some money to make. The revenue generated by the investments might exceed their cost (though the same is almost never true of tax
cuts), but that doesn’t change the fact that the investment has a cost that must be included in the accounting.

The administration has already confirmed the mistake and say they will refine it later, they even said they did it on purpose. Not sure why the
administration would be confirming something that isn't true especially when it makes them look bad.

Why do or would you believe them? Has one single promise ever made by this administration been completed?

Have we ever seen dts tax returns
Has dt ever fully divested from his income
Why is the Government Ethics office unable to get the information they need by the June 1st deadline to 'vet' his staff.

We were promised that all these things would be done in time. Well the time is well passed. No other administration in history has so callously
floated the Laws and Constitution of the US.

According to the Committee for a Responsible Federal Budget, for Trump's tax cuts to pay for themselves, the economy would have to grow at 4.5 percent
over the next 10 years. That's two and a half times the growth rate projected by the Congressional Budget Office.

Grow the economy. There is no missed digits or faulty math. If the tax plan they propose is passed the numbers are correct.

and here is a Politico article that after the headline reads...

On paper, Mulvaney is right: under Trump’s plan, the government would have a $16 billion surplus by 2027; during the 10-year budget window, the
annual deficit would average 1.4 percent of GDP, less than half its 2016 level. And the U.S. debt-to-GDP ratio—a measure of the country’s ability
to pay its debt—would fall from 77 percent in 2018 to under 60 percent in 2027, according to White House figures.

I actually found in the linked Vanity Fair article on page 3, an explanation for where the error is. I tried to copy a paragraph from that article,
but it seems their HTML is not Android-friendly. So I'll paraphrase.

The claim is that the $2T cuts in taxes will be offset by $2T in budget cuts, and then that the $2T is also assumed to balance the budget.

The error is in the claim, not the budget.

The budget is balanced dynamically, not statically. In other words, it does not assume a continuing GDP growth rate of 1.6%, which is what we have at
present. It makes the assumption instead that the tax cuts, combined with simplification of taxes in general, will cause the economy to expand as it
always has after a tax cut.

If we assume, as some are doing, that GDP growth will remain consistent, then we simply cannot continue without making even more extreme cuts in
social programs, basically reverting to a pre-1929 policy of zero welfare for anyone. There's simply not enough money to go around as is, and we are
rapidly running out of credit as well.

If we assume, as the budget proposal does, that tax rates will increase GDP growth as they have in the past, then there will be no $2T drop in revenue
for the savings to go to. The savings from the new budget will go directly to reducing (and eliminating in 10 years) the deficit.

That is not an error; it is dynamic rather than static accounting. We can debate that all day long, but to say there's a glaring $2T math error in the
numbers is intellectually dishonest.

I do not know what Trump's spokesmen said... I'd like to see a transcript of their statements. But I'm done satisfying my curiosity. The burden of
research to prove me wrong via those statements is on someone else.

Thank you for the explanation. I found it above... finally. The OP seems to be quite angry about something tonight.

The 'discrepency' is over the 'cost' of the tax cuts. Trump's budget doesn't directly calculate that. It calculates GDP based on 3% growth and
taxation revenues based on a percentage of GDP. If the GDP grows at a rate of 3% (or better) and his tax plan produces the revenue percentage it is
supposed to, the budget balances.

Will it attain 3% growth? I don't know, to be honest. My crystal ball is on the fritz right now. But I do expect a simpler, fairer, tax plan to be
beneficial to the economy and boost GDP growth. I also know 3% was considered normal not all that many years ago.

I think all you did here was take a general anti-Trump bandwagon fury and put a topic in a forum to attack.

I think you're right.

You know, I keep expecting Trump to actually slip up on something. I keep clicking these threads to see if this is it... if this is the time we find
out Trump was lying to us all along. But they have thus far been false... "Look! Smoke! There's a fire!" Then I get there and find out the smoke is
coming from a DNC projector.

They're building up my opinion of the man by trying so hard to take him down... we live in historic times.

I try to give reasoning behind my conclusions, because in the end we're all human (well, redneck is sorta human, I guess) and we all can make
mistakes. Never trust anyone completely... including me. Ask to see their work.

The video didn't really address this, I don't know what this is pertaining to. I would have to see the bill to see what the bill is trying to do.
It's after midnight and I do not feel like sorting through a government bill, which is always full of BS and twisted loopholes and other mumble
jumble. Maybe tomorrow after I get back from a free lunch at Sherman Williams, a free seminar on the use of natural herbs around here and their
medical use, and a free Pizza from a card we purchased from the radio station, ten pizzas for twenty five bucks at some of the best pizza joints
around here. Yeah, it is an advertising ploy, but a large Pizza for two and a half bucks is great.

I doubt if I will be reading it tomorrow. Is there a link to this proposal on the net somewhere?

The 'discrepency' is over the 'cost' of the tax cuts. Trump's budget doesn't directly calculate that. It calculates GDP based on 3% growth and
taxation revenues based on a percentage of GDP. If the GDP grows at a rate of 3% (or better) and his tax plan produces the revenue percentage it is
supposed to, the budget balances.

No, that's not right.

Using the 3% rate (which is much higher than EVERYONE's predictions) they're counting the same $2 trillion twice.

On the one hand, they're estimating that the tax cuts will be deficit neutral. I'm sure I don't have to explain what "deficit neutral" means to you
but for other folks who may not be familiar, the idea here is that cutting taxes will spur growth and so while the tax rate is lower there will be
more tax payers at the lower rate so it works out to be a net 0 change in tax revenue.

The exact verbiage is on page 13 of the proposal (right column, 2nd paragraph):

The Budget assumes deficit neutral tax re-form, which the Administration will work closely with the Congress to enact

To say that trickle-down nonsense is extremely optimistic would be an understatement but that's neither here nor there. The problem is that
back on page 9, the proposal says this:

To help correct this and reach our budget goal in 10 years, the Budget includes $3.6 trillion in spending re-ductions over 10 years, the most ever
proposed by any President in a Budget. By including the anticipated economic gains that will result from the President's fiscal, economic and
regulatory policies, the deficit will be reduced by $5.6 tril-lion compared to the current fiscal path.

$5.6 trillion - $3.6 trillion = $2 trillion.

Do you see the problem now? They estimated an increase in tax revenue from growth to be $2 trillion which they apply to closing the deficit on page 9.
Then on page 13 they say that growth resulting from the tax cuts will make them deficit neutral. And this is all in the hypothetical future where they
estimate GDP growth YoY to reach 3% by 2022 and stay there through 2027.

According to the Committee for a Responsible Federal Budget, for Trump's tax cuts to pay for themselves, the economy would have to grow at 4.5 percent
over the next 10 years. That's two and a half times the growth rate projected by the Congressional Budget Office.

Oh, so for them to pay for themselves, they have to exceed the already overly optimistic expectations of the proposal by more than 100%? You do
realize that the proposal assumes 3.0% growth not 4.5% right and that's up from 1.6%.

For you to say that makes it all work out is like saying that the proposal makes sense because... unicorns.

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